Telfair was born in Brooklyn, New York, the son of Erica Telfair and Otis Telfair, a Marine who served in Vietnam.[4] Living in the Surfside Gardens projects he attended Abraham Lincoln High School and became one of the most highly coveted high school basketball prospects in the country.[5]

Considered a five-star recruit by Rivals.com, Telfair was listed as the No. 2 point guard and the No. 6 player in the nation in 2004.[6] He had originally committed to the University of Louisville, but opted instead to make the jump to the NBA straight out of high school.

On January 1, 2005, Telfair scored 14 points on five-for-eleven shooting, making four of five free throws to go with five rebounds and five assists with one turnover.[7]

In February 2005, interim coach Kevin Pritchard promoted Telfair to the starting lineup. Although Telfair averaged 6.8 points and 3.3 assists, the Trail Blazers ultimately lost 23 of their final 28 games while finishing with the team's worst record since 1975.

Telfair wore number 31 with the Trail Blazers, as he did in high school. It served as a reminder of where he came from, growing up on 31st Street in Coney Island, New York.

Under new head coach Nate McMillan, Telfair began the 2005–06 season as the starting point guard. He was occasionally paired in the backcourt with another high school draftee taken in 2005, Martell Webster. Telfair's production was an improvement over his 2004–05 numbers, but it was still considered[by whom?] below par for an NBA starting point guard. As a result, he experienced increasing pressure from the Portland media. In December 2005, Telfair suffered a thumb injury and was replaced in the starting lineup by Steve Blake. Blake had fewer turnovers and more assists. Telfair returned to the court on January 9, 2006, after missing 12 games. Blake continued to start with Telfair coming off the bench. Although the Trail Blazers were already eliminated from playoff contention, Telfair scored the winning basket against the Houston Rockets on April 5, 2006.

In the 2007–08 season, Telfair had his best season as a pro averaging 9.3 ppg and 5.9 apg. Telfair also had a stretch of five games in which he had 40 assists and just 4 turnovers. He wore number 3 for the Timberwolves because the number 31 was taken by then shooting guard Ricky Davis.

On July 22, 2008 the Minnesota Timberwolves re-signed Telfair to a three-year contract. Because the Timberwolves fired head coach Randy Wittman and replaced him with interim coach Kevin McHale, Telfair played for his sixth coach in his fifth NBA season. He played in 75 games including 43 starts.

Right after the 2011 NBA lockout ended, Telfair signed with the Phoenix Suns in December 9, 2011.[14] His contract had him initially staying for one year, but he received a team option to play for a second season in Phoenix. Telfair started for the Suns in a 91-87 victory against the Los Angeles Clippers. Telfair would score a season high 21 points in a 105-91 loss to the San Antonio Spurs. During the month of April in the shortened season, Telfair averaged an impressive 10.9 points and 3.6 assists on a .522 shooting percentage. In other months, he averaged 4.7 points and 1.9 assists on a .358 shooting percentage.[15]

On October 16, 2006, Telfair had a chain reported to be worth $50,000 snatched from him while he was outside Sean "Diddy" Combs' restaurant, Justin's. Rapper Fabolous was shot outside of the same club shortly after.[21] The following night, Telfair left a preseason basketball game against the New York Knicks at Madison Square Garden to observe a police lineup, but he did not identify any of the potential suspects.[22]

Telfair and a friend, Al Eden Fuentes,[23] were arrested early on April 20, 2007 and charged with felony possession of a weapon, after a traffic stop.[24] The traffic stop was prompted when Telfair was spotted driving his 2006 Range Rover 77 mph on the Bronx River Parkway, a 45 mph zone. Telfair was driving under a suspended Florida license. When the police searched Telfair's vehicle, a loaded .45 caliber handgun was found under the passenger's seat. Both Telfair and Eden claimed to not have any knowledge of the handgun. Police had yet to determine the registration status of the handgun.[23]

In September 2008, Telfair pleaded guilty to criminal possession of a weapon and received three years probation. In October 2008, the NBA handed down a three-game suspension following the guilty plea.[25]

Telfair is the subject of the book The Jump: Sebastian Telfair and the High-Stakes Business of High School Ball (ISBN 1594864470) by Ian O'Connor, and Through the Fire, a documentary film by Jonathan Hock which follows Telfair through his last year in high school and his decision to choose the NBA over college. Telfair is the cousin of former NBA and current CBA player Stephon Marbury, and the half-brother of former NBA player Jamel Thomas. Telfair went to high school at Lincoln High School in the Coney Island section of Brooklyn, New York City, and was the school's all-time leading scorer until Lance Stephenson broke his record in 2009. Telfair was also named New York State Mr. Basketball following his senior season at Lincoln.[26][27]